Initial Entry – GLD Broken Wing Butterfly

At approximately the 1 minute and 20 second mark I state that “Sellers step in;” I mis-spoke and should have stated that “Buyers stepped in.” (to push the price back up off the low)

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GLD Broken Wing Initial Entry and embedded buyback explained

Using the ETF (electronic traded fund) GLD (proxy for GOLD that trades at approximately 10% of the spot price) we are initiating a bullish biased trade into GLD using an options strategy known as a Broken Wing Butterfly.

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Gold BWB

I’ve got GLD staying around 103/104 until 11/28
I would look for GLD to bounce off 100.74 (50%) and then regain the 20ma by then.
Once it regains the 20ma, I would look for a move to 106.42

I like the following BWB
MAR GLD 104/101/95 @ .90 Credit

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2009.07.27 – A Look at Gold (GLD)

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That should just about cover everything and keep our attorneys happy.